VANDERLANDE INDUSTRIES PRIVATE LIMITED (SUCCESSOR IN INTEREST OF VANDERLANDE INDUSTRIES SOFTWARE PRIVATE LIMITED),PUNE vs. ACIT CIRCLE -2, PUNE

There is a delay of 296 days in filing of this appeal before the Tribunal for which the assessee has filed an affidavit explaining the reasons for such delay. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, in light of the decisions of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 Live Law (SC) 339, condone the said delay and proceed to decide the appeal.

Briefly stated, the facts of the case are that Vanderlande Industries Software Private Limited („VISPL‟) is a private limited company incorporated under the Companies Act, 1956. It is engaged in rendering software engineering control services to its group entities enterprises from its SEZ facility at Pune. For AY 2018-19, VISPL filed its original return of income u/s 139(1) of the Income Tax Act, 1961 (the “Act”) on 29.11.2018. VISPL merged with Vanderlande Industries Private Limited („VIPL‟), (the assessee now in the present appeal) effective from 1st April, 2019. The Assistant Commissioner of Income Tax, International Taxation, Circle-2, Pune (“Ld. TDS Officer/AO”) initiated proceedings u/s 201(1)/201(1A) of the Act in respect of certain payments made to Vanderlande Industries B.V. („VIBV‟) on which taxes were not deducted at source by VISPL. During the proceedings before the Ld. AO/TDS Officer, the assessee submitted that with respect to the impugned payments made to VIBV, taxes were not withheld since the said payments were not taxable as FTS or as royalty in view of Article 12 of India-Netherlands Double Taxation Avoidance Agreement („DTAA‟) and accordingly, VISPL should not be treated as „assessee in default‟. It was also submitted that during the FY 2019-20, VISPL merged with VIPL pursuant to a scheme of amalgamation approved by the Hon‟ble National Company Law Tribunal, Mumbai Bench vide its order dated 31.01.2020 and the merger was effective from 1st April, 2019. A letter intimating about the amalgamation was duly submitted by the assessee with the Ld. JAO on 21.10.2020 and the Ld. TDS Officer on 18.12.2020. The Ld. TDS Officer/AO, however, in disregard to the above submissions made proceeded to pass an order u/s 201 on 18.02.2021 in the name of VISPL treating VISPL as „assessee in default‟ on account of non-deduction of tax at source.

Aggrieved by such order of the Ld. TDS Officer/AO, the assessee preferred an appeal before the Ld. Addl./JCIT(A). There was non- compliance of notices of hearing and the Ld. Addl./JCIT(A) dismissed the appeal of the assessee upholding the action of the Ld. AO/TDS Officer.

Dissatisfied, the assessee is in appeal before the Tribunal raising the following grounds of appeal : “1. General ground:

The Ld. AR submitted that the non-compliance to the notices issued by the Ld. Addl./JCIT(A) was not intentional. He submitted that post merger of VISPL with VIPL, email id of Ex-Director, Mr. Ameya Dharap was updated on the Income Tax Portal. Mr. Ameya Dharap left the organization on 21.02.2022. Subsequently, Mr. Ameya Damle was admitted as a new Director and his email id was updated on the e-filing portal. Mr. Ameya Damle also left the organization on 05.11.2022. Thereafter, Mr. Aditya Pophaliya was hired by the assessee on 26.02.2024 to handle all the tax related matters of the assessee. In the meantime, Mr. Onkar Soni was in- charge for all the tax related matters who thereafter moved to the Finance Department and Mr. Aditya Pophaliya was handed over the responsibility to handle all the tax matters from 27.02.2024 onwards. Accordingly, Mr. Aditya Pophaliya‟s email id as well as his Mobile No. were updated on the Income Tax portal on 06.03.2024. He submitted that all the notices of hearing issued by the Ld. Addl./JCIT(A) were sent to the email id of Mr. Ameya Dharap who was an Ex-director of the assessee and left the organization on 22.02.2022, post which his email id was non-existent and inactive. This was duly informed to the Department in support of which the Ld. AR showed the email received from the Income Tax Department confirming the updation of Mr. Aditya Pophaliya‟s email id and Mobile No. Also, the screenshot evidencing issue of notices to the email id of Ameya Dharap was placed on record. The Ld. AR therefore prayed that since the non-compliance has not resulted on account of any negligence/malafide intention on the part of the assessee and the assessee has a strong case on merits, in the interest of justice, the assessee may be granted an

The Ld. DR, on the other hand, supported the order of the Ld. Addl./JCIT(A). 8. We have heard the Ld. Representatives of the parties and perused the material on record. We find that the Ld. TDS Officer/AO has held the assessee to be the „assessee in default‟ u/s 201 and 201(1A) of the Act in respect of tax of Rs.90,40,186/- and interest of Rs.37,21,674/- on account of non-deduction of tax at source in respect of FTS payment of Rs.8,35,89,331/- made to VISPL to VIBV. The Ld. Addl./JCIT(A) has dismissed the appeal of the assessee due to non-compliance of notices of hearing issued by him despite of several opportunities granted to the assessee. It is the submission of the Ld. Counsel for the assessee that such non-compliance was not intentional but resulted owing to the reasons cited above. Perusal of appellate order reveals that the Ld. Addl./JCIT(A) has applied the decision of the Hon‟ble Supreme Court in CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC) and CIT Vs. Multiplan India Pvt. Ltd., 38 ITD 320 (Delhi) and dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. Addl./JCIT(A) may decide the appeal ex-parte where the assessee does not prosecute his appeal in spite of several opportunities. Nonetheless, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereof and the reasons for the decision. We observe that the Ld. Addl./JCIT(A) has passed the impugned order in concurrence of the order of Ld. AO/TDS officer without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.

On the above facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play to set aside the order of Ld. Addl./JCIT(A) and restore the matter back to his file for adjudication afresh and pass speaking order on merits as per fact and law after allowing a reasonable opportunity of being heard to the assessee. Needless to say, the assessee shall provide the requisite support in terms of submitting the